January 25, 2025 - TRA Newswire

The railroad business keeps rolling along. Union Pacific exceeded Wall Street expectations with a 7% profit increase in the final quarter of 2024 while BNSF Railway announces that it will invest $3.8 billion in capital improvements in this new year, on par with 2024.

BNSF's 2025 Plans

Most of BNSF's capex will be dedicated to replacing and upgrading rail, ballast and ties, while maintainings its rolling stock. BNSF has scheduled 11,400 miles of track surfacing and undercutting with the replacement of some 410 miles of new rail and replacement of 2.5 million ties in the railroad network. $535 million in the 2025 plan is tagged for expansion and improved efficiency programs. While major projects in California, Illinois and Arizona will be highlighted there are no major upgrades planned for Texas.

President and CEO Katie Farmer said "Our 2025 capital plan reflects BNSF’s ongoing commitment to investing in our network to support our customers’ growth and operating a safe, efficient and reliable railroad. .We are focused on ensuring our network is prepared to handle the demands of the future while continuing to provide the strong service our customers expect."

Opporational Efficiency is Driving Results for Union Pacific

 Fourth quarter results from "Uncle Pete" resulted in a $1.76 billon profit, up 7% over what analysts expected. 

“Our strong fourth quarter results represent a great capstone to a very successful year for Union Pacific,” said Jim Vena, Union Pacific Chief Executive Officer. “The team has fully embraced our strategy to lead the industry in safety, service, and operational excellence. That commitment has produced industry leading financial results in 2024, punctuated by our strong finish to the year. We will carry this momentum into 2025 as we seek to unlock the full potential of the UP franchise.”

UP's 2024 fourth quarter net income was $1.8 billion, or $2.91 per diluted share. These results include $40 million of labor expense related to the ratification of a crew staffing agreement. This compares to 2023 fourth quarter net income of $1.7 billion, or $2.71 per diluted share.

Reported net income for full year 2024 was $6.7 billion, or $11.09 per diluted share. These full year results compare to full year 2023 net income of $6.4 billion, or $10.45 per diluted share.

Fourth Quarter Summary: 2024 vs. 2023

Financial Results: Strong Service and Efficient Performance Enabled Volume Growth; Fourth Quarter Records for Operating Income and Net Income

• Operating revenue of $6.1 billion was down 1% driven by lower fuel surcharge revenue, unfavorable business mix, and lower other revenue, partially offset by increased volume and core pricing gains.
• Revenue carloads were up 5%.
• Operating ratio was 58.7%, an improvement of 220 basis points. This includes an unfavorable 70 basis point impact from the ratification of a crew staffing agreement.
• Operating income of $2.5 billion was up 5%.  

Operating Performance: Improved Network Fluidity Amid Volume Growth; Fourth Quarter Record for Workforce Productivity

• Quarterly freight car velocity improved 1% to 219 daily miles per car.
• Quarterly locomotive productivity declined 3% to 136 gross ton-miles (GTMs) per horsepower day.
• Quarterly workforce productivity increased 6% to 1,118 car miles per employee.
• Fuel consumption rate improved 1% to 1.078, measured in gallons of fuel per thousand GTMs.

Full Year Summary: 2024 vs. 2023

Financial Results: Higher Operating Revenue Driven by Volume and Core Pricing Gains

• Operating revenue of $24.3 billion was up 1% driven by increased volume and core pricing gains, partially offset by lower fuel surcharge revenue, unfavorable business mix, and lower other revenue.
• Revenue carloads increased 3%.
• Operating ratio of 59.9% improved 240 basis points.
• Operating Income of $9.7 billion was up 7%.
• Union Pacific’s 2024 capital program totaled $3.4 billion.
• The company repurchased 6.3 million shares in 2024 at an aggregate cost of $1.5 billion.

Operating Performance: Strong Improvement Across Safety, Service, and Operational Excellence; Full Year Record for Workforce Productivity

• Union Pacific’s reportable personal injury and reportable derailment rates both improved.
• Freight car velocity improved 2% to 208 daily miles per car.
• Locomotive productivity improved 5% to 135 GTMs per horsepower day.
• Workforce productivity improved 6% to 1,062 car miles per employee.
• Fuel consumption rate improved 1% to 1.082, measured in gallons of fuel per thousand GTMs.